Munusamy & Ors. vs The Managing Director, Tamil Nadu State Transport Corporation (Villupuram) Ltd.

REPORTABLE IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO.1754 OF 2018 (Arising out of SLP (Civil) No.12416 of 2016)

Munusamy & Ors. …. Appellants Versus

The Managing Director, Tamil Nadu State ….Respondent Transport Corporation (Villupuram) Ltd.

J U D G M E N T

A.M. Khanwilkar, J.

1. This appeal emanates from the judgment and order

passed by the High Court of Judicature at Madras dated

16.04.2013 in C.M.A. No.2819 of 2012. The High Court

allowed the prayer for grant of enhanced compensation Signature Not Verified Digitally signed by

amount in favour of the appellants. The appellants seek SUBHASH CHANDER Date: 2018.02.09 14:26:43 IST Reason:

further enhancement of compensation amount on the ground 2

that the High Court has not provided for future prospects,

while computing the compensation amount. The appellants

rely upon the recent decision of the Constitution Bench of this

Court in the case of National Insurance Company Ltd. Vs.

Pranay Sethi and Ors.1, to buttress their submission.

2. Before we deal with the grievance of the appellants, it is

apposite to reproduce the relevant extract of the impugned

judgment which reads thus:

“7. We have heard the learned counsel for the respondent on the above submission.

8. In the absence of specific proof of employment, the Tribunal rightly has taken the earning of the deceased at Rs.4,000/­ per month and deducted 50% towards personal expenses since the deceased were bachelors. However, the proper multiplier to be adopted in the case must be 18, since the deceased were 21 and 20 years respectively. A sum of Rs.20,000/­ to each of the claimants towards loss of love and affection and a further sum of Rs.5,000/­ towards transport expenses were granted.

9. Accordingly, in C.M.A. No.2819 of 2012 compensation payable would be as follows:

(a) Loss of Dependency Rs.4,32,000/­ (Rs.4,000/­×12×18) (b) Loss of love and affection Rs. 60,000/­ (c) Transport Rs. 5,000/­ (d) Funeral Rs. 2,000/­

1 AIR 2017 SC 5157 3

(e) Loss of estate Rs. 2,500/­

Total = Rs.5,01,500/­”

3. On perusal of the judgment under appeal, it is evident

that the High Court has not provided for future prospects

while computing the compensation amount under the head

‘loss of dependency’. The necessity to provide future prospects

has been expounded by the Constitution Bench of this Court

in National Insurance Company Ltd. (supra). It will be

useful to reproduce paragraph No.59 of the said judgment,

which reads thus:

“59. Having bestowed our anxious consideration, we are disposed to think when we accept the principle of standardization, there is really no rationale not to apply the said principle to the self­employed or a person who is on a fixed 44 salary. To follow the doctrine of actual income at the time of death and not to add any amount with regard to future prospects to the income for the purpose of determination of multiplicand would be unjust. The determination of income while computing compensation has to include future prospects so that the method will come within the ambit and sweep of just compensation as postulated under Section 168 of the Act. In case of a deceased who had held a permanent job with inbuilt grant of annual increment, there is an acceptable certainty. But to state that the legal representatives of a deceased who was on a fixed salary would not be entitled to the benefit of future prospects for the purpose of computation of compensation would be inapposite. It is because the criterion of distinction 4

between the two in that event would be certainty on the one hand and staticness on the other. One may perceive that the comparative measure is certainty on the one hand and uncertainty on the other but such a perception is fallacious. It is because the price rise does affect a self­ employed person; and that apart there is always an incessant effort to enhance one’s income for sustenance. The purchasing capacity of a salaried person on permanent job when increases because of grant of increments and pay revision or for some other change in service conditions, there is always a 45 competing attitude in the private sector to enhance the salary to get better efficiency from the employees. Similarly, a person who is self­employed is bound to garner his resources and raise his charges/fees so that he can live with same facilities. To have the perception that he is likely to remain static and his income to remain stagnant is contrary to the fundamental concept of human attitude which always intends to live with dynamism and move and change with the time. Though it may seem appropriate that there cannot be certainty in addition of future prospects to the existing income unlike in the case of a person having a permanent job, yet the said perception does not really deserve acceptance. We are inclined to think that there can be some degree of difference as regards the percentage that is meant for or applied to in respect of the legal representatives who claim on behalf of the deceased who had a permanent job than a person who is self­employed or on a fixed salary. But not to apply the principle of standardization on the foundation of perceived lack of certainty would tantamount to remaining oblivious to the marrows of ground reality. And, therefore, degree­test is imperative. Unless the degree­test is applied and left to the parties to adduce evidence to establish, it would be unfair and inequitable. The degree­test has to have the inbuilt concept of 46 percentage. Taking into consideration the cumulative factors, namely, passage of time, the changing society, escalation of price, the change in price index, the human attitude to follow a particular pattern of 5

life, etc., an addition of 40% of the established income of the deceased towards future prospects and where the deceased was below 40 years an addition of 25% where the deceased was between the age of 40 to 50 years would be reasonable.”

Again, in the concluding paragraph No.61 the Court observed

thus:

“61. In view of the aforesaid analysis, we proceed to record our conclusions:­

* * *

(iii) While determining the income, an addition of 50% of actual salary to the income of the deceased towards future prospects, where the deceased had a permanent job and was below the age of 40 years, should be made.

The addition should be 30%, if the age of the deceased was 48 between 40 to 50 years. In case the deceased was between the age of 50 to 60 years, the addition should be 15%. Actual salary should be read as actual salary less tax.

(iv) In case the deceased was self­employed or on a fixed salary, an addition of 40% of the established income should be the warrant where the deceased was below the age of 40 years. An addition of 25% where the deceased was between the age of 40 to 50 years and 10% where the deceased was between the age of 50 to 60 years should be regarded as the necessary method of computation. The established income means the income minus the tax component.”

4. On 03.03.2007, the deceased (Palani), who was only

around 21 years of age at the time, was riding a motorcycle

bearing Registration No. TN­22 AP 5092 along with his friend, 6

one Haridass as a pillion rider, from Tambaram to

Chengalpattu on GST Road, Maraimalai Nagar, opposite

Vikram Hotel, when they collided with a bus bearing

Registration No. TN­21 N 0943 belonging to the respondent

Transport Corporation, which was driven in a rash and

negligent manner. The deceased was unmarried and working

as a contract worker in Hyundai Car Company,

Sriperumbudur. Applying the dictum of the Constitution

Bench referred to above, the appellants are justified in

insisting for grant of future prospects at the rate of 40% of the

established income. The High Court has held that the earning

of the deceased at the relevant time can be taken as

Rs.4,000/­ per month. The High Court did not provide 40%

towards future prospects on the established income of the

deceased. Thus, the monthly loss of dependency, in the facts

of the present case would be Rs.4,000 + 1,600 = Rs.5,600/­.

5. In other words, instead of amount awarded by the High

Court towards loss of dependency in the sum of Rs. 4,32,000/­,

the same will stand modified to Rs.6,04,800/­ (Rupees six 7

lakh four thousand eight hundred only) along with interest at

the rate of 9% (nine percent) per annum. We are not

disturbing the other directions given by the High Court in

respect of other heads.

6. Accordingly, the respondent Transport Corporation must

deposit the additional amount of compensation of

Rs.1,72,800/­ (Rupees one lakh seventy two thousand eight

hundred only) along with interest, as awarded in the preceding

paragraph, within a period of eight weeks from the date of

receipt of the copy of this judgment in the Court of Additional

District & Sessions Judge, Fast Track Court­IV, Chennai

(Motor Accident Claims Tribunal, Chennai).

7. In other words, the compensation payable to the

appellants would be as follows:

(a) Loss of Dependency Rs.6,04,800/­ [Rs.5,600 – 50% of 5600)×12×18] (b) Loss of love and affection Rs. 60,000/­ (c) Transport Rs. 5,000/­ (d) Funeral Rs. 2,000/­ (e) Loss of estate Rs. 2,500/­ Total = Rs.6,74,300/­ 8

8. As a result, the Appeal stands allowed. The compensation

awarded by the High Court is enhanced from Rs.5,01,500/­ to

Rs.6,74,300/­ [Rupees six lakh seventy four thousand three

hundred only]. The respondent Transport Corporation is

directed to deposit the entire award amount as indicated above

with interest at 9% (nine percent) per annum less the amount

already deposited if any, within a period of eight weeks from

the date of receipt of a copy of this judgment and the

appellants shall be entitled to the compensation in the

proportion specified by the Tribunal. The first and second

appellants are entitled to withdraw the amount deposited

upon verification of due application and the share of the third

appellant (minor) shall be deposited in any of the nationalised

banks till she attains majority and the second

claimant/mother is entitled to withdraw interest thereon once

in three months towards meeting the needs of the minor. Upon

turning 18, the minor appellant is entitled to withdraw her

respective share.

9

9. Accordingly, the appeal is allowed in the

aforementioned terms with no order as to costs.

.………………………….CJI.

(Dipak Misra)

…………………………..….J. (A.M. Khanwilkar)

…………………………..….J. (Dr. D.Y. Chandrachud) New Delhi;

February 09, 2018.